Can I Transfer Money From A Credit Card To A Bank Account?  - NerdWallet Australia (2024)

Yes, it’s possible to transfer money from your credit card to your bank account through a cash advance, but it’s not recommended.

Good budgeting and money management won’t prevent unexpected expenses, but knowing you have put money set aside for these scenarios will give you peace of mind and reduce stress. Confidently managing your personal finances, however, and having a system in place that works for you can take time to set in motion.

For unplanned expenses, you might decide to use your credit card to transfer money to your bank account. There’s nothing wrong with this approach, so long as you pay it off as soon as you can, ideally within the interest-free period. The strategy: Put the expense on your credit card, earn rewards points and repay the total balance without interest.

But what if you can’t use a credit card? You’d need to transfer money from the credit card to a bank account. Although it’s the same credit card, this is a different scenario with costs and considerations. It is possible to transfer money from your credit card to a bank account, but it’s not recommended.

Cash advance vs balance transfer

When you withdraw money from your credit card, it’s called a cash advance. This is done either as an ATM withdrawal or an online transfer from a credit card to a debit account. Every time you do this, you’re charged a cash advance fee, around 3% of the value of the transaction. This amount also incurs interest from that day, rather than after the usual 55-day interest-free period.

Don’t confuse a cash advance with a balance transfer. A balance transfer is when you move debt from one credit card to another credit card to consolidate debt and secure a lower interest rate.

A balance transfer aims to reduce interest charges over the long-term, while a cash advance is a short-term decision to allow you to use the credit card as a cash source.

» MORE: The real cost of a credit card cash advance

Types of cards that allow transfers

Most financial institutions, including the Big Four, allow you to transfer money from a credit card to a bank account. There’s no specific credit card type that’s designed for cash withdrawals or transfers – but the low-interest products are the better cards to use, simply because the interest starts to accrue immediately. Interest is charged on a daily basis for cash advances. Banks are warning consumers to avoid cash advances, due to the costs and risks involved.

Common restrictions to know

Check the specifications of your bank and how they treat cash advances. There could be limitations depending on your credit card, credit limit, daily card limit and current debt. Banks can block cash advances on specific cards, such as the CommBank Neo products or the Westpac Lite Card.

» MORE: Can you withdraw cash from a credit card?

How to transfer funds from a credit card to a bank account

Mobile or online banking steps:

1. Sign into your online banking (app or desktop).
2. Select Transfer.
3. Choose the credit card for Pay From, and the bank account for Pay To.
4. Enter the amount and confirm.
5. Confirm you approve the cash advance.
6. Wait a few minutes and check the bank account.

On the phone steps:

1. Call your bank and inform them you’d like to process a cash advance.
2. Confirm the amount, the credit card and bank account.
3. Follow the representative’s prompts.
4. Allow for up to three business days to receive the funds.

If it’s urgent, do the transfer online instead of over the phone.

What to consider before you make a transfer

How much can be transferred?

The daily cash limit on your card and available credit determines how much can be transferred or withdrawn.

How long will it take to transfer?

The money should transfer within minutes of processing the transaction.

What are the costs?

It depends on who you bank with but expect to pay approximately 3% of the transaction amount. Your interest rate and how long you take to pay it off will determine the interest costs. You can’t avoid the cash advance fee, but you can control the interest by paying it back in full as soon as possible.

» MORE: Credit card fees to know

Alternative solutions

If it’s not possible to transfer money from a credit card to a bank account, you do have other options.

If the reason you need the money is to pay your rent or a bill, talk to the company you owe money. See if you can either get an extension or use your credit card the regular way to avoid the cash advance. Alternatively, you could dip into your savings and pay it back. Or borrow money from a family member or friend.

You also could consider a low-interest personal loan or some kind of longer-term support from your bank. Avoid Buy Now, Pay Later (BNPL) or short-term lenders, as they charge exorbitant interest in exchange for the convenience of fast cash.

With all matters of personal finance, it pays to make decisions with a long-term outlook.